Gas prices revision depends on LNG supply

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Shanchita Shitu
Published : 06:00, Sep 18, 2018 | Updated : 11:16, Sep 18, 2018

File photo shows a floating storage and regasification unit (FSRU), a special type of vessel used for storing and degasifying the LNG and supplying it on shore. REUTERSThe new gas prices will be determined on the basis of supply of imported liquefied natural gas (LNG) to national grid, according to sources at the Bangladesh Energy Regulatory Commission (BERC).

Announcement on the revised prices may come early as next week once the energy regulator get the details of the current scenario of supply.

After joining the club of liquefied natural gas (LNG) importers, Bangladesh moved to another round of gas price hike after revising it last year.

The country became the first LNG-importing nation in 2018 after the first shipment arrived from Qatar on Apr 24.

Initially the proposal of price revision was made assuming a supply of 1000 million cubic feet (cft) daily to the national grid along with the 2,800 million cft supplied from the country’s gas fields.

Distribution companies then said that price will need to go up by 75 percent, if 1,000 million cft of imported gas is added to the national grid every day.

Petrobangla had informed the BERC that Excelerate Energy will supply LNG from April, 2018 while Summit will begin from January 2019. Given this arrangement stays on schedule, a 75-percent price hike for a year is logical, it said.

But the supply of imported LNG supply began from Aug 18 with a daily flow of a meagre 75 million cft and gradually increasing up to 300 million cft.

Besides that, the supply by Summit is expected to delay as there’s no visible progress in construction of its LNG terminal.

 “We have to increase the price because of the imported LNG otherwise, it’s not needed. That’s why we have to consider the the details of imported gas already supplied and what might be the amount in near future,” BERC member Rahman Murshed told Bangla Tribune.

“Petrobangla’s information appears to be inconsistent with reality. And the law does not allow us to revise the price for more than a year,” he added.

Officials said that the imported LNG is not being added to the national grid for the time being.

Gas prices were revised up by an average of 22.70 percent in February last year with households hit with over a 50 percent monthly rise for stoves.

In March this year, gas transmission companies forwarded a proposal to increase prices by on an average 75 percent. They, however, did not propose to hike prices for household and commercial connections.

Following the proposals, the BERC held a series of public hearings over the issue in June this year.

The regulations require announcement of revised prices within 90 days after the hearing concludes.

Price (per cubic metre) after last year’s revision

Type of connection

Price

Rise (in percent)

Power

Tk 3.16

12

Captive Power

Tk 9.62

15

Fertiliser

Tk 2.71

5

Commercial

Tk 17.04

50

Households are charged at a monthly rate in two categories — Tk 900 for single burner stove and Tk 950 for double burner stove, which was hiked by 50%.

 

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